Interest rates on online savings accounts have started to increase in recent weeks, Moneyfacts.co.uk has revealed.
According to Moneyfacts.co.uk, Barnsley Building Society, Intelligent Finance and Principality Building Society all announced their intention to increase the rates on their online savings accounts
Commenting, head of Moneyfacts.co.uk, Louis Kaszczak said: "With so much competition in the fixed rate bond
market, many smaller providers have found that they are unable to compete and instead are looking at other areas to attract savers.
"Online based savings accounts are cheaper and easier to run for providers and this saving can be passed on through higher rates," he added.
In fact, Moneyfacts.co.uk revealed that the average rate on an online savings account (0.95%) is nearly twice that of a branch based savings account (0.50%).
Many online savings accounts now offer competitive interest rates – the ING Direct Instant Access savings account
offers 2.75 per cent, while the Sainsbury's Internet Saver
offers 2.60 per cent.
Mr Kaszczak said: "Moneyfacts.co.uk research shows that one in three savers are looking for easy access accounts, so it is a market that providers are wise not to ignore.
"Despite no change in bank base rate, savers are seeing the benefits through increased rates as many providers continue to look to their savings book to fund their lending activities."Compare online savings accounts »
© Fair Investment